With the company raising its annual projections, indicating strong holiday demand and boosting investor confidence, Lululemon Athletica (NASDAQ:LULU) shares rose over 15% on Friday, and more than 25% in the past five days. The excellent quarterly performance of the athleisure retailer has inspired at least 17 brokerages to raise their pricing targets.
While rejuvenating its apparel with trend-driven designs meant for younger clients, the company has applied focused marketing methods to boost sales in China, its second-largest market. Lululemon’s approach worked, as shown by a 36% rise in third-quarter revenue from China, despite the growing competitiveness from companies such Vuori and Alo. “Despite competitive pressures, Lululemon’s customer loyalty remains robust,” analyst Raymond James Rick Patel said.
Among the 36 brokerages covering the stock, Stifel’s price objective was raised by $68 to $438, most optimistically compared to the consensus estimate of $374.10 on Wall Street. Lululemon shares were trading Friday at $404.64, and they were about to rise most significantly single-day since 2018. The company’s positive view fits the broader health of the retail industry, shown by the strong sales over the Thanksgiving weekend. In line with this, Victoria’s Secret and Ulta Beauty revealed strong findings on Thursday that led to respective shares rising by 7% and 10%.
This article first appeared on GuruFocus.
